Entrepreneurs can’t succeed without ongoing learning, no matter how smart, lucky, or dedicated they are. In his research on entrepreneurial learning, Erek Ostrowski, the founder of Verve Coaching, has documented that entrepreneurial success is as much a function of what one learns as what one earns.
Entrepreneurial Learning is about what and how an entrepreneur learns in the process of pursuing and building a business.
Learning from experience and reflection
Entrepreneurs learn by encountering and responding to critical events and problems that unfold in real time. These situations challenge an entrepreneur’s habitual ways of thinking and acting. They stimulate critical reflection and lead to fresh awareness of the challenges faced, and an understanding of how responses and behaviors work (and don’t work) in each situation.
Starting a business from scratch, navigating a cash flow crisis, or acquiring a second firm, can lead entrepreneurs to develop new abilities such as the ability to network, to find and access resources to address an issue, to assemble an effective team and critically, to learn from mistakes.
For an entrepreneur to translate the lessons of experience into reusable insight requires reflection. On a practical level, reflection involves revisiting one's experience, reviewing what happened, and evaluating its meaning. Done effectively, critical reflection leads to changes in self-awareness and an understanding of an entrepreneur’s strengths, weaknesses, and underlying motivations. It can fundamentally alter the way an entrepreneur approaches business challenges.
The importance of higher-level learning for entrepreneurs
At its core, entrepreneurship is defined by the dual processes of opportunity exploration and opportunity exploitation. These activities correspond to higher-level and lower-level learning.
Opportunity exploration refers to identifying and creating new market opportunities, including researching information about changes in the social, political, economic and/or demographic environment, evaluating readiness and risk, and generating new ideas.
Exploration involves higher-level learning, or learning that can reframe an individual’s understanding of past experiences. Higher-level learning requires learners to critically examine the values and assumptions that underlie their notions about what constitutes effective action. It leads to the search for and discovery of new solutions and behaviors that can deliver better outcomes.
Opportunity exploitation means marshalling the resources to plan and realize an opportunity, for example: developing efficient business systems, and securing resources to pursue the business opportunity.
Exploitation involves lower-level learning. Lower-level learning is adaptive. It involves changing existing actions or strategies in light of feedback generated through observation of the consequences of past action. Lower-level learning can include responding to changes in the business environment, correcting problems, and adopting new methods. However, because learning in these situations doesn’t require critical reflection, the values and assumptions underlying the entrepreneur’s firm remain unexamined and unchanged.
How coaching can help
Successful entrepreneurs need both styles of learning to prosper. While many entrepreneurs become proficient at lower-level learning, higher-level learning is far less common. Entrepreneurs must learn to reflect critically on their own thoughts, values, and underlying assumptions in order for their firms to survive and grow.